Monopolistic Competition, Trade and Endogenous Spatial Fluctuations

Ottaviano, Gianmarco (1996) Monopolistic Competition, Trade and Endogenous Spatial Fluctuations. Bologna: Dipartimento di Scienze economiche DSE, p. 30. DOI 10.6092/unibo/amsacta/5068. In: Quaderni - Working Paper DSE (240). ISSN 2282-6483.
Full text available as:
[img]
Preview
Text(pdf)
License: Creative Commons Attribution Non-commercial

Download (373kB) | Preview

Abstract

This paper investigates the possibility of endogenous fluctuations in the international distribution of economic activities in the presence of increasing returns, monopolistic competition, trade and convex adjustment costs. Differently from the existing literature, it does not allow for any local productive externalities. Using a 2-country dynamic general equilibrium model, it derives necessary and sufficient conditions for the existence of self-reinforcing relocation processes. It shows that the occurrence of multiple equilibria and endogenous fluctuations is associated with a high degree of increasing returns to scale as well as low trade and adjustment costs. Under such circumstances relocation processes are driven by self-fulfilling expectations.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Ottaviano, Gianmarco
Keywords
monopolistic competition, increasing returns, international trade, spatial fluctuations
Subjects
ISSN
2282-6483
DOI
Deposit date
06 Apr 2016 10:55
Last modified
06 Apr 2016 10:55
URI

Other metadata

Downloads

Downloads

Staff only: View the document

^